The most annoying words in my house are, “The ice-maker is out again and I called the repair service.”
When you hear those words, run. And don’t forget to pick up your checkbook.
The people who study how humans think describe the more time and money scenario as either “escalation of commitment” or the “sunk cost effect.” The fancy labels obfuscate the reality that this is how we screw up big time in our firms and in our lives.
It’s throwing good money after bad. It’s wasting more time on a failed venture.
We’ve all seen the more time and money trap in action and most of us have lived it. It’s the mega project with no end in sight that continues to suck the scarce resources away from other critical activities. It is the failed strategy that executives pursue with vigor even as the results suggest things are getting worse.
The more time and money problem shows up at home with that older car you continue to repair in lieu of buying something newer. It shows up in my case with the six-year old refrigerator that seems to defy permanent repair. I own this appliance twice due to my stubborn belief that these appliances should last longer than six years and to my confidence that the extended warranty was nothing more than a source of profit for the appliance maker.
We are wired to invest more time and money in our initiatives, relationships, or ventures. Giving up is a sign of defeat…an acknowledgement that we were wrong. We are not good at admitting our mistakes. In professional settings with executives I coach, they fear that admitting they were wrong will jeopardize their standing or their job.
We also struggle with a chronic case of over-confidence in our abilities to fix, salvage, rescue, or repair. One bias feeds the other.
The best prevention for this potentially fatal trap in the workplace is an environment where people are encouraged to hit the “stop” button. The firm’s leaders own the obligation to create this environment and to model the behavior themselves for everyone to see.
Look around at the activities that are draining you, your team, and your time and energy. Are one or more of these initiatives similar to your kid’s old car or your six year old refrigerator? If yes, it’s time to act. It is time to model good leadership behavior.
The Bottom-Line for Now:
Face a failure head-on, publicly, and without shame. Announce that you are hitting the stop button. Work with others to assess where reality diverged from the plan. Strive to understand where the assumptions crumbled. Look for execution failures but be careful to avoid pointing fingers and spreading blame. Spread learning. Assess how this failure can be used to prevent a repeat and then keep moving.
Art Petty is a popular speaker and workshop presenter focusing on helping professionals and organizations learn to survive and thrive in an era of change. When he is not speaking, Art serves senior executives, business owners and high potential professionals as a coach and strategy advisor. Additionally, Art’s books are widely used in leadership development programs. To learn more or discuss a challenge, contact Art.